Canada has all the issues and none of the advantages of the US market 10 times its size.
Real-estate securitization has DoS’d key class 5 to 7 zones. This means empty industrial buildings stay empty, as the tax-deductions on inflated-valuations are also used to underwrite more debt... worth more than any lease sucker deal. Try to convince a competent CEO a small $32k/month triple-net lease isn’t going to bleed an inexperienced company into receivership eventually.
Pick just about any US state, hire 30 locals, and making a profit gets so much easier. The US financial ecosystem is generally far more harmonious even to type C corporations.
As an outsider in unregulated markets, one could see Corporate sponsored prostitution, targeted bribery, and blackmail. You just aren't important enough if you don't know these facts yet.
Canada has some of the silliest smart people in the world =)
Canada is a clear win. Set up a corporation in a single day. Fairly straightforward taxes (not the lowest around, but still fairly simple). Technical cities (Waterloo, Toronto, Vancouver, Ottawa). Zero corruption, unless you're in the construction industry, but effectively nothing. Easy employee termination (2 weeks pay without cause, 0 weeks pay with cause). Low occurrence of lawsuits, especially medical, and much smaller settlements (highest medical suit I've heard of in my personal circle was $100k, and it was clearly deserving). Technocratic politicians usually win elections. Only about 1% of GDP on the military (vs 2+% for most of the developed world, and 5% for the US). Easy access to American products and markets.
Most startups avoid these markets for an extremely good reason, they are well protected from competition. Every company that's tried to enter the regulated Canadian markets gets shut down pretty quickly either by bankruptcy, lawsuits, or forced acquisition. It's particularly brutal here. What we have in Canada can no longer be described as capitalism. It is totalitarian corporatocracy.
The Canadian market is crazy, but comparing it to the US is not very illustrative. The US market is far more expansive, due to the amount of usable land and having 10x the population.
A better comparison might be Canada to California.
Really? Investing in Canada must be really bad then because moving to the US is not easy. (At least not if you aren't sponsored by BigCo whose large legal department will take care of the insane paperwork for you)
It speaks more to canada's lack of entrepreneurial spirit than anything else. There's a reason good canadian companies go to the U.S. to get funding...
Canada is a better place to live but due to the low population, culture (less consumerism/socialist mentality) you are not going to generate outsized returns from pure capitalism.
The U.S. doesn't need any examples to follow since the machine seems to be running quite well. If anything Canada needs to set itself apart because we're losing too many entrepreneurs to the pretty neighbour below us.
One thing that younger Canadians and foreigners don't seem to grasp is that Canada's economy is basically a handful of abusive corporations pretending to be a country.
The Maritimes are dominated completely by the holdings of a single family. The West is dominated by resource extraction and banking. Ontario and Quebec are owned by banking and manufacturing families. And then there's Robellus...
But that said, there's also that raising Canadian capital is historically a fool's errand. Raising loonies is so hard it's basically pointless, it's almost always better for entrepreneurs to register as American corporations, pretend to be American, and raise American money.
Because, at the end of the day, every party in Canada is beholden to their campaign financiers. Every party. And no money wants to flow outside of the proven channels.
Entertaining but I disagree with most of the article. It's about time we stop comparing Canada to America. Canada is about the size of California in terms of population. This is like comparing a small tech company to Apple.
Canada is great, but easier access to capital in America.
Canada is receiving so much money for investment because it is perceived as the most stable country in the Americas.
But Canada just doesn't have enough assets to soak all that money up. So that money chases the few assets such as residential property stock.
Canada could legally allow all this money to be invested in startups or companies that need funding instead of passive assets. That way, the same money would be funneled to actual companies and workers, while at the same time, providing assets to all this foreign money.
That's great, a few months ago I saw a US VC overview of "investing in Canada"...it was scary. A common route is to use a whole whack of sibling companies (like 3 or 4) to transfer the money, it was a mess.
Their conclusion: just move to the US, it's easier.
These explanations are all very interesting, but the reality is that any good business person must decide when to invest. The conditions have been far from favourable for years in Canada. Real estate is simply too expensive. Sure commercial real estate for the plant or office or whatever facility you need is outrageously expensive, but then, when you wanted to hire somebody or try, they need to pay rent or a mortgage. People aren’t demanding outrageous wages because they suddenly think they’re worth it. They just know how expensive it is to pay the bills and groceries.
Government policy, both the conservatives and the liberals, are very cosy to large corporations. Most of their announcements, that supposedly help small businesses are simply far out of reach due to requirements for revenue or number of employees, and is essentially corporate welfare. The BDC and EDC are a joke, both crown corporations run by people very disconnected from any sort of reality.
Of course it was driven by interest rates, but the insidious thing about interest rate is it allows zombie corporations. These organizations that should’ve gone out of business being acquired or shut down, but because of their size and revenue were able to continue to borrow more and more and more money at extremely low interest rates. of course it’s coming to an end now as financial reality hits. Many of these companies are forced to cut, but they were actually hopelessly dysfunctional so over time though finally either just be bought or go to business.
all of this to say, the last 20 years has been a terrible time to start a business in Canada but a lot of markers are indicating things could be getting better soon. While it may be good for somebody starting a business isn’t good for necessarily the average person.
anyway, the thing I find absolutely laughable is that we need more education for entrepreneurs. The funniest thing I’ve read all year. there is no education that will make someone an entrepreneur, but someone may learn enough to be scarred out of taking the plunge.
finally, the idea that there’s a single definition of Canadians is completely stupid and misinformed. culture varies dramatically from coast to coast and from the south to the north. if someone thinks that nobody wants to work, or nobody wants to make money, it speaks about the people that they associate with not the country they live in. I think that is true most anywhere.
This part of the article was a bit silly -- Canada is nothing like this. I feel like he tied his own experiences with late-soviet bureaucracy to his frustrations with conservative Canadian business climate; but the two are not analogous really.
Canada is a market economy with very low corporate taxes and when compared to European economies regulation is actually very light. Our business norms and regulations are tied in most part very closely to the United States.
But the investment culture is very conservative and the economy is tied excessively to resource extraction.
And yes, there is a long history of a few families having strong dominance over everything, and of businesses/companies gaining monopolistic positions through regulation. An example of this is the wine industry in Ontario -- I could go on a long rant about that... but I'll restrain myself.
California benefits from a dominant market position. If you have the choice to found where the investors and the talent are, why would you pick Canada when the tax is the same?
Yeah that comments is bullshit. It’s very easy to establish a business in Canada. The bureaucracy is efficient by comparison to most developed countries including the US. The tax authority is not scary like the IRS and the rules are reasonable and easier to understand. The provinces have considerable control over economic policies and taxation, generating competition between regions.
I’ve run tech companies in Canada for over 20 years. It’s a perfectly fine place to do business.
> One thing that younger Canadians and foreigners don't seem to grasp is that Canada's economy is basically a handful of abusive corporations pretending to be a country.
I think that's a gross oversimplification. There certainly is a tiny fraction of the population that holds the vast majority of Canada's wealth, but you could say the same of the US or really a lot of other countries, and it's not like all those companies have existed since confederation, so I don't think that's really a reasonable way to define Canada's economy. The Canadian GDP is $1.6 trillion USD, and those companies certainly have a hand in a lot of it, but you'd have to make a pretty long list of companies to even get to $1 trillion...
> But that said, there's also that raising Canadian capital is historically a fool's errand. Raising loonies is so hard it's basically pointless, it's almost always better for entrepreneurs to register as American corporations, pretend to be American, and raise American money.
>
> Because, at the end of the day, every party in Canada is beholden to their campaign financiers. Every party. And no money wants to flow outside of the proven channels.
It's more a function of Canadian banking and money management, at least historically, being far more conservative the the US's wild west. There's a reason Canada largely avoided the financial crisis of 2008, and it's not because Canadians are smarter than everyone else.
That said, it's fair to say there have been a number of Canadian tech startups that have done quite well for themselves, not to mention non-tech companies that have managed to be quite successful on the world stage. Maybe not at the same level as the US, but then, few countries can really measure up to that standard (and the consequences that come with it).
While I would say Canada's political parties are beholden to their campaign financiers, that hasn't exactly produced what I'd call "stability" in the political arena... and there's a fair bit of independence between the political arena and the economy (despite how inconvenient that is for some narratives). I wouldn't agree that money can't flow outside of proven channels for that reason. It's more that you have to make a much more solid case to get any significant funding from Canadian sources.
Real-estate securitization has DoS’d key class 5 to 7 zones. This means empty industrial buildings stay empty, as the tax-deductions on inflated-valuations are also used to underwrite more debt... worth more than any lease sucker deal. Try to convince a competent CEO a small $32k/month triple-net lease isn’t going to bleed an inexperienced company into receivership eventually.
Pick just about any US state, hire 30 locals, and making a profit gets so much easier. The US financial ecosystem is generally far more harmonious even to type C corporations.
As an outsider in unregulated markets, one could see Corporate sponsored prostitution, targeted bribery, and blackmail. You just aren't important enough if you don't know these facts yet.
Canada has some of the silliest smart people in the world =)
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